FFCRA Tax Credit is Extended into 2021 by Congress but FFCRA Leave Extension is Declined

On December 31, 2020, the federal Families First Coronavirus Response Act (“FFCRA”) expired. This act required employers with fewer than 500 employees provide sick and family leave benefits for certain COVID-19 related reasons. It was thought that the FFCRA’s sick and family leave provisions would stretch into 2021 as part of the pandemic relief package President Trump signed on December 27, 2020. Because these provisions were not extended, after December 31, 2020, employers would not be required to provide paid leave under the FFCRA.

Even though these provisions were not moved into 2021, the FFCRA tax credit was extended by the relief package reimbursing employers for the cost of providing FFCRA leave, through March 31, 2021. As of January 1, 2021, employers will no longer be required to provide FFCRA leave. Employers who are covered and voluntarily offer this leave are able to utilize payroll tax credits to cover the cost of benefits paid to employees through March 31, 2021. This relief package has not altered the qualifying reasons employees are allowed to take leave, the caps on the amount of pay employees will be entitled to receive, or the documentation requirements stated by the FFCRA. The amount of time that employees are entitled to take under the FFCRA has not been changed by the law. FFCRA states that full time employees are allowed a one-time allotment of 80 hours of paid sick leave and 12 weeks of extended family medical leave. Under certain circumstances, the employer may be able to claim a tax credit for the second round of extended Family Leave Medical Act benefits paid to the employee in 2021.